ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

UNIT-V
Strategic Perspectives in Entrepreneurship

Strategic growth in Entrepreneurship

If only half of startups survive more than five years and only one third make it to 10, what’s the
one big thing you could do ensure your company is sustainable? The answer is to create growth
strategy for your business.

A growth strategy involves more than simply envisioning long term success. If you don’t have a
tangible plan you’re actually losing a business or you’re losing a chance of losing business to
competitors.

1. Establish a value proposition:

For your business to sustain long term growth, you must understand what sets it apart from the
competition. Identify why customers come to you for a product or service.

2. Identify your ideal customer:

You got into business to solve a problem for a certain audience. Who is that audience? Is that
audience your ideal customer? If not, who are you serving? Nail down your ideal customer, and
revert back to this audience as you adjust business to stimulate growth.

3. Define your key indicators:

Changes must be measurable. If you’re unable to measure a change, you have no way of
knowing whether it’s effective. Identify which key indicators affect the growth of your business,
and then dedicate time and money to those areas. Also, A/B test properly -- making changes
over time and comparing historical and current results isn’t valid.

4. Verify your revenue streams:

What are your current revenue streams? What revenue streams could you add to make your
business more profitable? Once you identify the potential for new revenue streams, ask yourself
if they’re sustainable in the long run. Some great ideas or cool products don’t necessarily have
revenue streams attached. Be careful to isolate and understand the difference.

The Valuation Challenge in Entrepreneurship

Business Valuation – calculating a business’ exact value

Useful when:

 Buying or selling a business/department or major assets

 Offering stock or profit sharing plans to employees
 Raising capital through loans and stocks
SANDEEP.L

 Determining various tax liabilities

 Giving out stocks

1
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

 Structuring buy/sell agreements

 Buying out a partner
 Going public

Underlying Issues when acquiring a venture (and why valuation is important)

 Goals of the Buyer and Seller – players might value the property differently due to their
goals.
 Emotional Bias – often on the seller’s side, sentimental attachment
 Reason(s) for acquisition – the buyer’s side, there are many reasons to buy a property, but
the buyer must stay follow his objectives and assimilate his assets and efforts

Because of this, it is important to evaluate an acquisition

 ROI
 Difficulties during the transition period
 Risks involved during the transaction; change of interest rates
 Number of potential buyers
 Effect on firm value if a turnaround in required
 Key personnel’s intention to stay
 Tax

Due Diligence – a thorough analysis of every facet of a business. There is a due diligence
format. Each major segment or section has question needed to be objectively answered. Potential
is a very important aspect to look into, but future trends of the business and its industry is vital.
Furthermore, looking at how much capital is necessary to keep the business is also important
(e.g. repairs, inventory, working capital, etc.)

Major questions in Due Diligence

 Why is the business being sold?

 Physical condition of the business?
 How many key personnel will remain?
 Degree of Competition in the industry?
 Conditions for the lease? (if any)
 Do any liens against the business exist?
 Will the owner/seller sign a covenant to not compete?
 Are any special licenses required?
 Future trends of the business and its industry?
SANDEEP.L

 How much?

2
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

Analyzing the Business

In analyzing small businesses, we should not compare these to large corporations since
there are factors like valuation methods that are useless to large corporations but of high
importance to small businesses. These are due to their (small businesses) common shortcomings
including:
(1) Lack of Management Depth, (2) Undercapitalization, (3) Insufficient Controls, and (4)
Divergent Goals between Owners.
With these shortcomings, careful analysis is required. Thus, small business owners or
entrepreneurs who are about to purchase a small business shall look into particular information
which are key in objectively evaluating a probable business venture. From the information
required in composing an effective business plan, some of these key things to evaluate a business
venture is as follows:
Business History, Market Competition, Sales and Distribution, Manufacturing, Facilities,
Employees, Ownership, Management, and Financial Aspect.

Valuation Methods
In this chapter, we will be focusing on three methods which are considered principal
measures for business valuations, namely: (1) Adjusted Tangible Book Value, (2) Price/Earnings
Ratio Method, and (3) Discounted Earnings Method. However, before we focus our attention into
these principal methods, let us first get familiar with these various valuation methods presented
below.
1. Fixed Price – Two or more owners set the business’ initial value based what they think it
is worth using figures from any one or a combination of methods. However, this may
cause inaccuracies due to personal estimates.
2. Book Value – Also known as Balance Sheet Method.
2a.Tangible Book Value – Net worth of the firm which is total assets less total
liabilities
2b.Adjusted Tangible Book Value – Similar to Tangible Book Value; however,
adjustments are considered making it more accurate.
3. Price/Earnings Ratio (Multiple Earnings) – More common with public corporations.
Capitalization rates vary depending on the firm’s growth (High-growth: lower rate while
Stable: higher rate) 15% capitalization rate is often used.
4. Discounted Future Earnings – Projects the future earnings of the business then
calculates the present value using the discounted/interest rate.
5. Return on Investment (ROI) – Shows the percent of the investment returned from the
net profit of a specific period. Net profit divided by the investment.
6. Replacement Value – This is useful when selling the company. This is the firm’s worth as
SANDEEP.L

if it is built from scratch where in inflation and depreciation of assets are considered.

3
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

7. Liquidation Value – Assume business ceases operation where it reflects the net amount of
the firm after payment of all liabilities. The net amount is then distributed to shareholders.
8. Excess Earnings – Very seldom used and method of last resort when no better method is
available. Although used to determine a firm’s intangible assets, this method does not
include intangibles with estimated useful lives (e.g. patents).
9. Market Value – Valuable only as a reference point to another similar firm. However, it is
difficult to find similar firms, which has recently been sold, as a comparison.

Out of the several methods discussed above, there are three major methods that are
considered the principle measures in current business valuations: (1) Adjusted Tangible Book
Value (2) Price/Earnings and (3) Discounted Future Earnings.

1. Adjusted Tangible Book Value Method

- Computes the net worth as the difference between the total assets and total liabilities.
- It is important to adjust for certain assets in order to test the true economic worth,
because inflation and depreciation affect the value of some assets. These adjustments
reflect in the balance sheet or income statements. Some examples of these
adjustments are:
o Bad debts
o Low interest, long term debt securities
o Investments in affiliates
o Loans and advances to employees or other parties
- In computing the adjusted tangible book value, goodwill, patents, deferred financing
costs, and other intangible assets are considered as upward or downward adjustments.
These adjustments reflect the fair market value of the assets, which eliminate some
inaccuracies in the value of the assets.
Example:
Book Value Fair Market Value
Net Assets
Inventory Php 1,000,000.00 Php 1,250,000.00
Plant and equipment Php 4,000,000.00 Php 5,000,000.00

Net Liabilities (Php 200,000.00) (Php 200,000.00)

Business Value or Net Worth Php 4,800,000.00 Php 6,050,000.00

SANDEEP.L

Excess: Php 1,250,000.00

4
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

It can be seen in the example above that after the adjustments, the business value is Php
6,050,000.00. Without the adjustments, the business value would have been Php 4,800,000.00.
Hence, the adjustments can make a big difference in the net worth of a business. It is also
important to note that the liabilities are not adjusted anymore, because the adjustments are only
applicable to assets.

2. Price/Earnings Ratio (Multiple of Earnings) method

- Usually used for valuing public corporations
- Simplest of the three principle methods
- For public corporations, the valuation is determined by multiplying the price/earnings
ratio to the number of common shares, wherein the price/earnings ratio is the market
price of each common stock divided by the earnings per share.
Example: A company has 100,000 shares of common stock that cost Php 5.00 each.
The company’s net income is Php 100,000. Find the valuation of the company using
the price/earnings ratio method.
Solution:
𝐵𝑢𝑠𝑖𝑛𝑒𝑠𝑠 𝑉𝑎𝑙𝑢𝑒 = 𝑃𝑟𝑖𝑐𝑒 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑅𝑎𝑡𝑖𝑜 ∗ 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐶𝑜𝑚𝑚𝑜𝑛 𝑆ℎ𝑎𝑟𝑒𝑠

𝑀𝑎𝑟𝑘𝑒𝑡 𝑃𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠𝑡𝑜𝑐𝑘

𝐵𝑢𝑠𝑖𝑛𝑒𝑠𝑠 𝑉𝑎𝑙𝑢𝑒 = ∗ 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐶𝑜𝑚𝑚𝑜𝑛 𝑆ℎ𝑎𝑟𝑒𝑠
𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒

𝑀𝑎𝑟𝑘𝑒𝑡 𝑃𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠𝑡𝑜𝑐𝑘

𝐵𝑢𝑠𝑖𝑛𝑒𝑠𝑠 𝑉𝑎𝑙𝑢𝑒 = ∗ 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐶𝑜𝑚𝑚𝑜𝑛 𝑆ℎ𝑎𝑟𝑒𝑠
𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑆ℎ𝑎𝑟𝑒𝑠

𝑃ℎ𝑝 5.00
𝐵𝑢𝑠𝑖𝑛𝑒𝑠𝑠 𝑉𝑎𝑙𝑢𝑒 = 𝑃ℎ𝑝 100,000 ∗ 100,000 = Php 500,000
100,000

- Private companies do not have open stock prices in the market, so they have to use a
multiple derived from a similar public corporation. This approach has 4 major
drawbacks:
o The stock of a private company is not publicly traded.
o The stated net income of a private company may not truly reflect its actual
earning power.
o The sale of a large controlling block of stock of closely held business can
command a premium.
o It is very difficult to find a truly comparable publicly held company, even in the
same industry.
SANDEEP.L

5
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

3. Discounted Earnings Method

- Relies on potential earning power of the company. Most analysts agree that this
accurately determines the true value of the firm and is often useful during acquisitions.
- Idea is that dollars earned in the future are worth less than the present (due to loss of
purchasing power), thus creating a need to discount cash flows.
- This method has 4 steps involved:
o Step 1: Expected cash flow is estimated
o Step 2: An appropriate discount rate is determined. The buyer’
o Step 3: A reasonable life expectancy of firm is determined
o Step 4: The firm’s value is determined by discounting the estimated net cash
flow by the appropriate discount rate over the expected life of the business. It is
simply getting the present worth of the business using cash flows and a
discount rate.

Term Sheets in Venture Valuation

- Investors look at this document before infusing capital in any venture.
- Outlines the material terms and conditions of a venture agreement and guides legal
counsel in the preparation of a proposed final agreement.
- Are very similar to letters of intent (LOI) in that they are both preliminary, mostly
nonbinding documents meant to record two or more parties’ intentions to enter into a
future agreement based on specified (but incomplete or preliminary) terms. Term
sheets are direct and in bullet point format, while LOI is a written in letter form and
focuses on the intentions in greater detail.
- Common terminologies found in a term sheet:
o Valuation – Net worth declared by the company
o Fully Diluted – Valuation is computed on a fully diluted basis, meaning all
securities (such as preferred stocks, warrants etc.) are included in the total
number of common shares.
o Type of Security – Convertibility of the investors’ stocks
o Liquidation Preference – fixed amount of money that all stockholders receive
prior to the selling or liquidation of the company.
o Dividend Preference – stock dividend percentages for each stockholder
o Redemption – The price any party (investor or company) would have to pay
should it want to retire a certain stock.
o Conversion Rights – the rights to convert common stocks to preferred stocks
and vice versa.
SANDEEP.L

o Antidilution Protection – price of converting stock should remain open to

negotiation.

6
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

o Voting Rights – The ratio of stocks a party holds in the company is directly
proportional to its voting rights.
o Right of First Refusal – holders of stocks can still purchase additional stocks
o Co-Sale Right – Investors get protection that founder is not simultaneously
selling to a third party.
o Registration Rights – Investors get the right to sell their stocks as soon as they
register for those stocks.
o Vesting on a Founder’s Stock – When the founder leaves the company, the
company can purchase the stocks owned by the founder.

Additional Factors in the Valuation Process

These factors also have a significant impact to the final valuation of the business venture.
 Avoiding start-up costs
Buyers are willing to pay more than the evaluated price for an existing firm
to avoid start-up costs.
 Accuracy of projections
The sales and earnings of a venture are always projected on the basis of
historical financial and economic data.
 Control factor
The degree of control an owner legally has over the firm can affect its
valuation; more control, more value.

In the end, the business valuation depends on so many factors. The best that can be done
is to use the accepted methods as a guide in order to accurately estimate the valuation. In many
situations, it also comes down to the negotiation and agreement between buyer and seller during
the purchase or sale of a venture.

---- “Price is what you pay. Value is what you get.” – Warren Buffet -----
The Final Harvest of New Ventures
Harvesting is the final phase in the entrepreneurial value creation process, which includes
building, growing, and harvesting. Harvesting is the process entrepreneurs and investors use to
exit a business and liquidate their investment in a firm. While all three phases are important
pieces of the entrepreneurial process, many entrepreneurs who fail to execute a successful
harvest do not realize the full benefits of their years of labor. Harvesting is the means for
capturing or unlocking value, reducing risk, and creating exit options. It is about more than
money, as it also involves personal and non‐financial considerations. As a consequence, even
upon realizing an acceptable monetary value for the firm, an entrepreneur who is not prepared
for the lifestyle transition that accompanies the harvest may come away disappointed with the
overall outcome. Thus, crafting a harvest strategy is as essential to the entrepreneur's personal
SANDEEP.L

success as it is to his or her financial success.

7
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

Technology

Defining Technology Entrepreneurship

The field of technology entrepreneurship is in its infancy when compared to other fields such as
economics, entrepreneurship, and management. However, we are at a point where we can
leverage the insights contributed by previous work to create a clearer working definition of
technology entrepreneurship.

This article proposes a general definition that identifies the distinctive characteristics of
technology entrepreneurship and describes its links with the fields of economics,
entrepreneurship, and management. The proposed formal definition of technology
entrepreneurship should prove valuable in adding to our understanding of how entrepreneurship
functions in a firm that invests in projects that are interdependent with advances in science and
technology.

The following definition of technology entrepreneurship is proposed:

Technology entrepreneurship is an investment in a project that assembles and deploys

specialized individuals and heterogeneous assets that are intricately related to advances in
scientific and technological knowledge for the purpose of creating and capturing value for a firm.

The proposed definition of technology entrepreneurship is based on four elements:

1. Ultimate outcomes. Value creation and capture are identified as two outcomes of
technology entrepreneurship because the sources that create value and the sources that
capture value may not be the same over the long run.
2. Target of the ultimate outcomes. The firm is identified as the target organization for which
value is created and captured.
3. Mechanism used to deliver the ultimate outcomes. Investment in a project is the
mechanism mobilized to create and capture value. A project is a stock of resources (i.e.,
specialized individuals and heterogeneous assets) committed to deliver the two ultimate
outcome types for a period of time.
4. Interdependence of this mechanism with scientific and technological advances. The
individuals involved in a project influence and are influenced by advances in relevant
scientific and technology knowledge. The project exploits or explores scientific and
technology knowledge. External and internal individuals and organizations co-produce the
project’s outputs.
SANDEEP.L

8
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

Business Incubation

Definition:

“Incubation is a unique and highly flexible combination of business development

processes, infrastructure and people, designed to nurture and grow new and small
businesses by supporting them through the early stages of development and change."
(UKBI.2007)

Business incubation is a process of support for businesses with growth potential. It can be
targeted at one or a combination of support to:

 Start-ups,
 Early stage businesses,
 Established businesses with new products/ new directions.

Business incubation supports the start-up and early stage of new business ventures by
providing them with the safe harbor, intensive resources and a development environment
in which they can flourish. A business incubator is usually the ‘physical’ manifestation of
this process and generally involves the provision of a ‘with-walls’ facility through which
concentrated business incubation support processes can be delivered. Businesses can
thus gain from close proximity to likeminded enterprises, mutual development and a
shared learning environment. ‘Virtual’ business incubation programmes also exist, though
they seek to deliver business incubation processes using means other than physical
premises. Although even virtual business incubators frequently provide some contact or
hot desking facilities i.e. client meeting rooms, conference mail and address hosting
facilities. Business incubatees (either in situ or virtual), often are only a part of a larger
mass of businesses supported by or at the business incubator.

‘Traditional’ business incubation normally consists of facilities usually include hot-

desking and small units (from 200sqft to 500sqft). Companies are provided with their own
office and pay rent (although it may be subsidized or ramped up over the period of their
stay). Companies usually stay for up to three years. There are significant levels of support
but usually on a diminishing basis to the point of exit. In some cases, support is
subsidized, through financial support from key partners such as RDAs, local authorities,
and through in-kind specialist business and technical support from associated corporates.
The level of subsidy is provided on a diminishing scale, with clients paying ‘market rate’
towards graduation. Anchor clients, through their payment of market rate often subsidize
the process also.

A number of business incubators also target individuals and businesses that have not yet
started formally/ officially. Support might consist of business planning, research support,
training, management development, personal development and assistance raising finance.
Facilities might include hot desking and ‘drop-in’ facilities. They also consist in supporting
potential entrepreneurs in understanding the advantages and challenges of enterprise. By
nature, they allow specific communities/groups and issues to be addressed at a very local
SANDEEP.L

level, with support being tailored for what they need and in a way they can readily apply.
These programmes often act as pipelines for further ‘business incubation’ services.

9
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

Why is business incubation important?

Business incubation features strongly in local, regional and national economic strategies
and is a key component in the development of most overseas, developed and developing
economies, particularly those aiming to develop a knowledge based economy. The benefits
of business incubators are numerous. Amongst other things, they can:

 Act as a catalyst for economic change development;

 Help young companies to negotiate the hurdles that often lead to their early downfall;
 Help entrepreneurs overcome the isolation and stress of starting a business;
 Provide access to an array of expertise, mentors, investors and specialist advisors;
 Provide visibility and credibility in the marketplace;
 Facilitate linkages with and the commercialization of university or corporate research
and new ideas utilizing research and development expertise and proof of concept
functions;
 Encourage faster sustainable growth and greater survival rates of new and existing
companies;
 Act as catalyst for urban and rural regeneration;
 Enable growing companies to become stand alone entities within the community

Recent research shows a rapid increase, nationally and abroad, of business incubation
environments. This is especially true in the late 1990’s and early 2000’s. This rapid
national and international increase in business incubation activity (from around 20 in
1997 to more than 270 identified environments in 2008 in the UK) can be attributed to a
number of factors, not least to a growth in regional policy interest and associated funding
in recent years at local, regional and national levels. The process of business incubation
has been identified as a means of meeting a variety of economic and social policy needs
which are often represented in incubators’ strategies - mission statement, objectives, and
targets.

Business incubation, innovation centers and managed workspace

Business incubation (process) is not managed workspace (place), nor is it universally

provided by innovation centers. There are indeed some innovation centers which purely
provide managed workspace. As detailed above, business incubation is fundamentally
about the provision of bespoke, hands-on business support to businesses at a stage of
their business life cycle where they are the most vulnerable.

Also, crucially, business incubation is a process which selects businesses/business

ideas, encourages their development and growth and requires them to graduate or move
on.

Instead, managed workspaces or serviced office spaces have:

 No intensive business support or mentoring - having access to a few hours of Business

SANDEEP.L

Link or general business support is not sufficient;

 Little or no access to wider local and regional networks, particularly finance, technical
expertise, etc;
10
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

 No focus on growing businesses with selection/entry requirements often restricted

(only) to their ability to pay the rent;
 No graduation policy, businesses are encouraged to stay as long as they can pay the
rent, which leads to ‘silting up’ and restricts the number of businesses that can be
supported;
 A primary objective of maximizing rental income, which is not committed to supporting
its client businesses.

Business incubators are focused, fundamentally, on mentoring their growing client

businesses and while the provision of office space is a key element, it is nonetheless
secondary. Whereas business incubation provides an environment allowing start-ups and
early stage businesses to accelerate their growth up to the point where ‘they can fly the
nest’, services offered by managed workspace commonly fit the needs of established, self
sustainable businesses. Links with managed workspaces are therefore useful when
preparing the incubatees to exit the business incubator and helping them finding grow-on
space.

Provided, Business incubation can be a resource intensive intervention and there are only
a small number of private sector providers which go beyond providing fully serviced
managed office space. When properly conducted business incubation is therefore almost
invariably subsidized from public revenues in one way or another.

India way-Entrepreneurship

The Entrepreneurship and Venture Capital Club and the Women in Business Club jointly hosted
a panel on “The Indian Way of Entrepreneurship” at the Indian School of Business (ISB) recently
as part of the Leadership Summit. V S S Mani of Just Dial, the telephone directory, Professor
Nandini Vaidyanathan of CARMa, an entrepreneur development center, Hari Balasubramanian of
RP Infosystems, and Sateesh Andra of Draper Fisher Jurvetson, a VC firm were the panelists.
The entrepreneurial environment in India offers unique challenges. Not only does the
entrepreneur have to focus on building her product, she must also learn to navigate the
uncertainties in the business environment. In this precarious scenario, it becomes necessary to
share entrepreneurial knowledge because it is easier to learn from others’ mistakes. The
panelists began by recounting the hardships that they underwent when they set up their
companies. “The challenges are different at different stages,” V S S Mani, Founder, Just Dial,
began, “The biggest challenge was getting well-qualified people in the initial stages.” His opinion
was echoed by Hari Balasubramanian, CEO, RP Infosystems, who felt that despite having a large
pool of well educated people, it was hard to fill middle management positions. In order to retain
employees, companies have adopted different tactics – sharing in equity was one such option.
However, most Indian companies still had reservations about giving employees shares. But is
SANDEEP.L

equity generally a good thing? Nandini Vaidyanathan, Director, CARMa, advices caution. “Equity
is expensive. Use it wisely,” she counseled. The panel dispelled many myths regarding equity.

11
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

Although, India did not lack funds, Sateesh Andra stressed on the need to readily accept
financial help, “you never know when money will dry up,” he advised.

The bigger problem though, is lack of knowledge. Most entrepreneurs “might have a brilliant idea
but have no idea on how to build a business around it,” Vaidyanathan emphasized. Mentors
could play a vital role in helping the entrepreneur. They can act as guides who can open doors
that would not normally open to an entrepreneur, if approached directly. Since mentors are not
always accessible, the question arose as to whether entrepreneurship could be taught in
classrooms. Some in the panel disagreed. Citing examples from his family, Andra, disagreed that
entrepreneurship could be taught in institutions. For an entrepreneur to succeed she needs
skills, knowledge and attitude, Professor Prasad Kaipa stated. While some entrepreneurs enter
the field with knowledge of their customers, others learn by practicing directly. All entrepreneurs
are spurred on by the idea of trying something new and have the willingness to fail, but “you
cannot be an entrepreneur if you do not know how to mitigate risk,” Professor Kaipa stressed. An
entrepreneur has to look beyond the initial bravado that motivated her to establish a startup in
the first place; she needs to have knowledge about how to handle the risk. She must learn from
her successes and her failures. Finally, it is also important to realize when to quit. A startup
must have realistic ambitions and know when to accept the buyout or quit. “Every entrepreneur
has two lives, not three,” Andra noted.

Women Entrepreneurs

WOMEN ENTREPRENEURS IN INDIA

There are several women entrepreneurs in India who have created and set standards for their
industries. Their stories are inspiring and motivating, and have generated a lot of interest not
only in India but also across the globe. This section will give you a glimpse into the lives and
achievements of some of the most successful women entrepreneurs from various sectors in India.

Vandana Luthra
Vandana Luthra, a well-known name in the corporate and entrepreneurial world, is the founder
of vandana Luthra Curls and Curves (VLCC) Health Care Ltd.; a beauty and wellness brand
represented in Asia, the Gulf Cooperation Council and Africa.

Early Life she was born in New Delhi on July 12, 1950 to a mechanical engineer father and a
mother who ran a charitable yoga ashram along with an Ayurveda doctor. VLCC was
incorporated in 1989 as a beauty, slimming and wellness center at Safdarjung Development Area
in New Delhi when vandana's elder daughter was merely 3 years old. She wanted to promote
health and fitness; moreover, she loved cutting giving hairstyles to people and experimenting
facials on her mother’s face which later turned out to be an implementation in the form of such a
huge empire.

Her parents used to invite little kids who lived in a slum near their house to watch TV when they
bought one. The idea of developing VLCC came to her when she saw her mother helping others
feel better, that’s when she decided to add beauty to it. As she had a love marriage, it was not
easy to mingle with the husband’s family and develop a loving bond with them. She is a complete
family woman though and ensures that her family and near and dear ones remain healthy, too
SANDEEP.L

and age with elegance.

12
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

Career and success Vandana went on to start VLCC on a small bank loan; she gave a tough
fight to time, criticism and judgment against women when the ideas of startups or women
entrepreneur were mere words with no support from either society or family. But Vandana was
lucky to have a supportive and cooperative husband and family. Her husband was willing to
financially support her to start her venture but she was adamant to not take money from anyone.
It took Vandana nearly 5-6 years to convince the medical fraternity about wellness' increasing
domain and its required bundling with beauty, health and fitness expertise. The challenges she
faced and the hardships she went through while making VLCC made her a much more
deterministic person. As the concept was new, it was not easy to get investment at initial stages
of building the startup. Starting up something single-handedly by a woman was something which
was seen as an extension of her hobby by the society. She was confident and assertive while
convincing people about what she was selling and how it could help them in a long run.
The venture grew from being a local Safdarjung- bounded startup to having a huge presence in
11 countries in South Asia, South-east Asia. Gulf Cooperation Council and most recently East
Africa. The first ever VLCC center that was built overseas was in Dubai in 2005 and since then, it
has seen a surge in its number of courses and centers all around the world. From the very
beginning, she knew that VLCC was not just a glamorous brand; instead, it was a clinic and
thus, needed to be projected in that manner. The brand still maintains its legacy where 60% of
her clients come from the doctors.

Her sheer dedication and hard-work arose a sense of confidence among many women in today's
era. For the upcoming entrepreneurs, she says, "Set your goals and works toward it. There is no
stopping anyone from reaching the pinnacle of success if there were firm commitment and
dedication.” These lines from her side are truly inspiring and a great lesson from someone who
has nurtured a brand of hers like her own child. She has been felicitated with a Padma Shri,
Women Entrepreneur Award, Rajeev Gandhi Women Achiever’s Award to name a few.

Meena Bindra
Meena Bindra is the founder or BIBA, the first Indian apparel retail brand for ready-made ethnic
wear for woman. BIBA Apparels Private Ltd., a leading name in the Indian fashion industry, has
a pan-India presence across 76 cities with 192 exclusive brand outlets and over 250 multi-brand
outlets. It also has its own e-commerce portal biba.in which has made the brand accessible to
people even in remote corners of the country.

Early Life Meena lost her father at a young age and was brought up by her mother in New Delhi
with her three brothers and two sisters. She completed her graduation in history from Delhi
University and got married to an officer in the Indian Navy when she was 19 years old. For the
next 20 years, she lived as a homemaker while moving with her husband all across the country;
she devoted all her time looking after the home and raising her two sons.

Career and Success Meena had always been passionate about designing clothes. In early 1980,
in Mumbai, she got an opportunity to follow her passion. As a 39-year-old housewife and mother
of two, Meena Bindra turned her boredom into the creative venture and made it to real business
with an initial investment of just INR. 8,000 taken loan from the bank. She pioneered the salwar-
kurta revolution in the country and united the women from the North to the South changing
their dressing styles. The ‘Punjabi suit’, as it used to be called, became an important part of
every woman's wardrobe.

Meena soon has celebrity clients and wives of famous industrialist. At this stage, she felt the
need to name her business and BIBA, the brand was born. The word “BIBA” is a Punjabi
endearment for a young and pretty girl. It implies sublime qualities, compelling Mrs. Meena
Bindra, the founder of BIBA, to use the name for the line of salwar kameez, and dupattas that
she launched in 1986.
SANDEEP.L

BIBA was launched as a brand in 1988 and from wholesaling the brand to traditional retailers; it
launched its first exclusive store at Inorbit Mall in Mumbai in the early nineties. Today, BIBA has
a Presence across 76 Indian cities with 192 exclusive brand outlets and over 250 multi-brand

13
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

outlets. BIBA was one of the first few brands to use the shop-in-shop model with Shoppers Stop,
Lifestyle, and Pantaloons.

From a hobby venture, BIBA became a business. With the entry of her sons into the business,
B1BA grew at breakneck speed. BIBA opened its first company-owned outlet in 2004, at In Orbit
and CR2 malls in Mumbai. In 2006, Kishore Biyani bought a 10% stake in BIBA for INR.
110crore. In March 2012, BIBA’s annual revenues stood at INR. 300crore.
BIBA as a company is very conscious of women’s problems. About forty percent of BIBA's
employees are women. The company gives adequate paid maternity leave and offers flexible work
hours to women with small children. As part of its corporate social responsibility initiatives, BIBA
spends the major sum on promoting girl education and empowerment.

In 2012 BIBA won the Images Award for Most Admired Women's Indian wear Brand of the Year.
Over the last decade, the company’s vision transformed many times but the ultimate goal has
always been to make BIBA the one-stop solution for the ethnic wear needs of women. “If you
passionately want to do something, then do it. Every woman has the potential and capability”
says Meena Bindra, Chairperson of BIBA.

Ritu Kumar
Ritu Kumar is a leading Indian designer who is credited with merging the ancient traditions of
Indian craftsmanship with modern sensibilities. She was the first woman to bring the boutique
culture to India. She has demonstrated that handmade products can be as profitable as and
even more glamorous than those made by machine.

Early Life Ritu Kumar was born on 11 November 1944, in Amritsar, Punjab. Her family moved
to Delhi, and Ritu graduated in 1964 from Lady Irwin College, Delhi. After her graduation, she
married and moved from Delhi to Kolkata, where she joined an amateur theatre group. In 1966,
she completed a course on artistry from Briarcliff College, New York.

Career and Success Ritu began her entrepreneurial journey in her 20s in the post-
independence era with hand block printers in a small village near Kolkata. Her journey was
difficult and involved forging a new road where none existed. Back then, cottage industry was a
very small industry in India, and Ritu soon found that she had hardly any retailers/buyers for
the end products that she was helping to create. In response to this problem of the lack of
retailers, she opened the country’s first boutique in 1966 in Delhi. Her boutique was a small
store that sold the items created under her supervision by villagers in their villages. There was
no organized marketing for her products. Information about her unique venture was passed on
mostly by word of mouth.

In the course of her entrepreneurial journey, Ritu has helped revitalize the lost or fading
traditional art of textile crafts and design, and enabled artisans skilled in them to continue to
work in their own environments. Today, Ritu’s boutiques usually display garments and
accessories that draw on the textile and embroidery heritage of India while appealing to women
across the globe. To give an example, her Indo-Western fusion wear achieves an aesthetic
balance by merging elements of Indian block prints, embroidery, and craft inputs with a Western
style. She has 34 outlets in all the major cities of India and one outlet in the USA.
SANDEEP.L

14
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

Strategies to develop women entrepreneurs

STRATEGIES FOR THE DEVELOPMENT OF WOMEN ENTREPRENEURS

The following efforts can be made to promote the development of women entrepreneurs in the
Country.
Encouraging Home-based Businesses
By operating her business from home, a woman can coordinate her household and business
responsibilities more easily, and be on the path to achieving work-life balance.
Widespread Business Education
Workshops, counseling services, vocational training, seminars, and conferences should be
organized frequently for women entrepreneurs. They should undergo training in effective
communication and management skills and practices to handle human resources as well as in
the legal aspects of running a business. Non-governmental organizations should be involved in
training women entrepreneurs at the grassroots level. Efforts should be taken to include
entrepreneur education at the school level. Gender Sensitization programmes should be
conducted for officials and trainers dealing with women entrepreneurs.
Better Financial Assistance
A separate and independent bank for women along the lines of Venezuela’s Women’s
Development Bank (WDB) should be established in our country to provide low-interest loans to
women.
Procedures for financial assistance by banks and government organizations should be simplified.
Women inspectors, if available, should be asked to inspect women’s enterprises.
Wider Access to Technology
Women entrepreneurs should acquire relevant training in the use of technology and in the
functioning of their plant and machinery. Effective and efficient use of technology such as the
Internet can help them acquire information about the variety, range, and quality of competing
products, and provide a platform for the publicity and marketing of their own products and
services.

Group Entrepreneurship/Grassroots Entrepreneurship

Through Self-help Groups
Group entrepreneurship is a collaborative approach to enterprise creation than benefits a
community.
It is a viable option for the weaker sections of society and can help women overcome their
poverty.
It empowers women and inspires then with confidence in themselves.
A scheme for group entrepreneurship is the self-help group (SHG), which enables the rural poor
to earn their own livelihood while participating in the process of development. The SHG scheme
has been extensively used by voluntary agencies for a long time but it has now been incorporated
into the conventional development process.
A self-help group is a small, voluntarily-formed, economically-homogeneous, and significant
group of rural/ urban poor who mutually agree to contribute to a common fund from which
money is agreed to be lent out to its members according to group decisions.
A typical rural women's SHG is a good example of capacity building for prospective
entrepreneurs. Its aims include enabling members with no educational, industrial, or
entrepreneurial background to become self-reliant; developing and enhancing the decision-
making capacity of members; instilling in members the strength and confidence to solve their
problems; and providing poor people with a forum where they can learn about collectively
mobilizing and managing money and matters.
In an SHG, women are organized into small groups. The group formation helps to generate peer
SANDEEP.L

group support and solidarity. The group meets regularly, initially for awareness generation. After
selecting a project, some members of the group attend training. At this stage, regular and timely
attendance at meetings becomes very important. The quantum of weekly saving is also decided

15
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

upon at this stage and each member is expected to contribute and participate. The initial
contribution is usually made by an NGO, a funding agency, or the government.
SHGs directly help women increase their income by providing loans for productive enterprises.
There are also other indirect ways in which SHGs can help increase income. For example, they
help avoid the interest rate of moneylenders and equip women to face possible loss of assets like
cattle and goats through insurance. However, SHGs cannot be considered as just a credit or a
savings group. Indeed, these groups form the basis for solidarity, strength, and collective action.

It needs to be mentioned that the SHG’s involvement in self-employment activities certainly

contributes to group entrepreneurship at the grassroots level. Group entrepreneurship offers an
opportunity for the rural poor to learn basic managerial skills and values. This is useful not only
to the poor but to society as a whole. Hence, group entrepreneurship through SHGs is an
investment in the poor as well as an engine of development.

A brief review of the credit-based NGO activities suggests that they can be classified into four
categories:

• NGOs acting as financial intermediaries between government schemes and the poor.
• NGOs lending directly to the poor.
• NGOs promoting self-help thrift and savings groups.
• NGOs functioning as non-governmental cooperative banks for the poor.

What Makes SHGs work? SHGs work because of the following factors:

• The self-help group addresses a felt need and a common interest: When people share a
common problem that can be addressed by group action, they are more likely to mobilize
themselves and work with support agencies to change the situation than if the problem applies
to only a few members. Social cohesion tends to break down as groups grow or spread over large
areas. For this reason, as groups expand, they either create subgroups or formalize regulations
and delegate decision making to smaller working groups.

• The benefits of working together outweigh the costs: The benefits may be economic (cash
savings, increased production, income and time saving), social capital formation (increased
ability to collectively solve problems), increased individual capacity (knowledge and skills),
psychological (sense of belonging and confidence), or political (greater access to authority, greater
authority, and reduced conflict).

• The group is embedded in the local social organization: Community organizations are most
successful when based on existing relationships and groupings or when members share a
common identity such as kinship, gender, age, caste, or livelihood.

• The group has the capability, leadership, knowledge and skills to manage the tasks: As
noted above, special attention needs to be given to ensuring that groups have the necessary
capacities for the tasks at hand. Those in leadership positions need to be respected and honest
in their dealings. In some cases, safeguards may need to be put in place to ensure that these
leaders are accountable to the group's members.

• The group owns and enforces its rules and regulations: Internalized rules and regulations
that are known to its members characterize all successful groups and associations. Group
members should be able to participate in determining the rules and the enforcement
mechanisms.
SANDEEP.L

The SHGS System A self-help group is a collection of about 10 to 20 people from a similar class
or region who come together to form a savings and credit organization. They often pool financial
resources to make small interest-bearing loans to their members. This process creates a code of

16
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

ethics that focuses on saving. The setting of terms and conditions and the accounting of loans
are done in the group by designated members.

A self-help group may receive support from a non-governmental organization (NGO), a

microfinance organization (MFO) or a bank. Alternatively, it could evolve from a traditional
rotating savings and credit association (ROSCA) or other locally initiated groups. The process of
formal linkage to an MFO or a bank usually goes through the following stages, which may take
anywhere between a few months and years:

• The SHG members decide to make regular savings contributions. These may either be kept by
their elected head in cash or kind or banked.
• The members start to borrow individually from the SHG for various purposes on terms and
interests rates decided upon by the group.
• The SHG members open a savings account in the group’s name with the MFO or bank for funds
that are not needed by members or in order to qualify for a loan from the bank.
• The MFO or bank sanctions a loan to the SHG in the name of the group. This loan is then used
by the group to supplement its own funds in lending money to its members.
• Members are generally married women between the ages of 25 and 50, to ensure a permanent
address and thereby the security of the loans.
• Members are selected from the same community so that they are mutually accountable and
understand the cooperative nature of the savings/loan plans. These voluntary SHGs are formed
of women of different faiths and communities.
• The SHG has no alignment to any political parties or programmes. Politics is not allowed to be
discussed at meetings.
• The SHG is willing to be initiated into a 12-month small mutual savings plan, which works like
an orientation for a bigger Micro-Finance Institution (MFI) or an ICICI Bank micro-credit
programme to follow. By this time, members of the SHG have demonstrated a proven ability to
save funds and pay interest.

Various SHG Activities to Promote Entrepreneurship SHGs carry out various activities to
encourage entrepreneurship. They set up microenterprises. Which are very small business units
manufacturing finished or semi-finished products. Their activities may include desktop
publishing, making greeting cards, book manufacturing, creating handicrafts, mono bloc units,
shops, and so on. Other activities that SHGs may carry out with the assisted funds are
improvised mat weaving, handlooms, fiber rope making, poultry farming, dairy farming, and gem
cutting and polishing.
Sabala: Exporting Indian Handicrafts Through SHGs
Sabala is a voluntary organization established in 1986 in the arid district or Bijapur in North
Karn ataka. It is registered under the Karnataka Societies Registration Act, 1960, and is
governed by a governing council. Mallamma S. Yalwar is the founder and chief executive of
Sabala. Sabala’s vision is to empower women and other marginalized communities to access
sustainable livelihood and opportunities. Sabala works with widows, destitute women, tribals,
physically-challenged girls and women, and economically backward women.

Sabala creates opportunities for women to learn a skill and to use these skills to generate
income. Over time, Sabala has striven to help the income generation of people in marginalized
communities through the revival of various traditional forms of crafts such as Banjara and
Kasuthi crafts. The Banjara community is a tribal community believed to have descended from
the Roma gypsies of Europe. The Banjara art, characterized by mirror work, is an original art
form passed down from one generation to the next. Sabala has trained and supported more than
one thousand Banjara women from villages situated in Bijapur district in handicraft work by
developing self-help groups.
SANDEEP.L

Sabala’s drive to organize the poor to work profitably stems from the conviction that there is
tremendous potential within the poor to help themselves and that this potential can be
harnessed by organizing them. For example, Sabala will help tribal women from Bijapur district
form an SHG comprising 20 members. After this, they will send trainers to train the selected
17
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

women in the art of making handicrafts. After the development of skills, the group members will
begin to generate income. The SHG members will then open a savings bank account in the name
of the group and members may decide to make regular savings contributions from their incomes.
The formation of Such SHGs at Sabala has resulted in the empowerment of women from
marginalized communities to have access to sustainable livelihood opportunities.
Sabala produces a wide range of products, including export-quality jewellery, ethnic hand bags;
cushion covers, gift items, kurtas, and wall hangings. In 1998, Sabala established the Craft
Development Centre to revive traditional craft, promote self-employment and entrepreneurship
among artisans, check migration, build the capacity and networking of artisans by self-help
groups, and provide marketing facilities to ensure regular income and sustainability.

Institutions supporting Women Entrepreneurship in India

There are various institutions in India that are devoted to promoting women’s entrepreneurship.
They have several schemes to help start, sustain, and support women entrepreneurs. The office
of the Development commissioner of the Ministry of Micro, Small, and Medium Enterprises of the
Government of India has opened a women’s cell to provide assistance to women entrepreneurs.
There are also several income generating government schemes, implemented by the Department
of Women and Child Development that provide assistance in setting up training-cum-income-
generating activities for needy women. This section lists the institutions supporting women's
entrepreneurship in India.

Consortium of Women Entrepreneurs of India (CWEI)

CWEI is a registered civil society and a voluntary organization that works for the economic
empowerment of women in India and all over the world, and aims to eradicate poverty and
unemployment among women. It consists of NGOs, voluntary organizations, self-help groups,
institutions and individual enterprises, both from rural and urban areas, which collectively
support and benefit from the activities taken up by the consortium. CWEI has a representation
in policy-making at the Ministry of Small-Scale Industries (SSI), Government of India. It is based
in New Delhi and acts as a springboard for promoting entrepreneurship at the grassroots level.

CWEI acts as a catalyst to bring marginalized and displaced women, including tribal women, into
the mainstream of economic activity by encouraging entrepreneurship and self-employment. It
promotes self-help groups, facilitates technology transfer, and explores marketing linkages within
and outside India. It does so by organizing buyer-seller meets, fairs and exhibitions,
international women entrepreneurs’ meets, training sessions, and conferences.

Federation of Indian Women Entrepreneurs (FIWE)

FIWE was founded in 1993 following the decisions taken at the Fourth International Conference
of Women Entrepreneurs held in Hyderabad in December. Today, it is one of India’s premier
Institutions for women and is completely devoted to entrepreneurship development. It is a
formation of an umbrella group of local organizations with a large membership base of 15,000
individual members/professionals and 28 member associations spread throughout the country.
Small-scale entrepreneurs account for approximately 60 percent of FIWE combined membership,
with large firms representing 15 percent and the remaining being microenterprises.

FIWE aims to foster the economic empowerment of women, particularly those belonging to the
small and medium enterprises (SME) segment, by helping them become successful
entrepreneurs and integrating them into the mainstream industry. It endeavors to provide a
networking platform, technical know-how, industry research and expertise, and skill
SANDEEP.L

development training to women. The organization provides Common forum for businesswomen
and ensures that their opinions, ideas, and visions are taken into account by policy makers and
by various other agencies for the development of women’s enterprises.

18
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

FICCI Ladies Organization (FLO)

FLO is the women’s Wing of the Federation of Indian chambers of commerce and Industry
(FICCI)—the apex body of industry and commerce in India. FLO was formed in 1983 as a
national- level forum for women with the objective of “women’s empowerment.” FLO aims to
promote the socioeconomic advancement of women by promoting entrepreneurship and
professional excellence. It has established chapters in major cities all over India, with the head
office in Delhi. The members comprise entrepreneurs, professionals, and corporate executives.
FLO conducts seminars, workshops, panel discussions, training programmes, and conferences
on a wide range of subjects to empower women entrepreneurs and professionals.

FLO works at three levels. At the grassroots level, it conducts entrepreneur development
programmes for women in the low income group, working with them and advising them how to
start a business, and following it through with some help in vocational training. At the middle
level, it conducts seminars, workshops, and training programmes on capacity building and skill
development for women running micro, small, and medium enterprises. At the senior level, FLO
conducts advanced management programmes for women at the helm.

Women's India Trust (WIT)

In 1968, Kamila Tyabji, a lawyer by profession, founded a charitable organization, women's India
Trust (WIT), in Mumbai. Since then, it has grown into a large organization with two shops in
Mumbai and a training and production centre known as the Kamila Tyabji WIT Centre in Panvel,
40 km from Mumbai. The Kamila Tyabji WIT Centre, along with a hostel for girls, was built in
1983. Encouraged by the success of WIT in Mumbai, the Kamila Trust, UK, was set up in the
early 1990s with the aim of selling in England items produced by the WIT family of women in
India. At first, friends held “home sales” in London and Yorkshire, and then in 1994 the Kamila
Trust opened its own shop, KASHI, in London. Every year, WIT trains 150 girls in areas such as
block printing, screen printing, nursing, toy-making, and catering. The WIT bazaar showcases
some of the products made by women who have been trained at WIT.
WIT’s mission is to help women from less privileged backgrounds help themselves by providing
unskilled and disadvantaged women a platform for advancement and empowerment. WIT offers
training and employment opportunities to any needy woman, irrespective of age, caste, or
religion. To this day, WIT remains dedicated to the original aim of its founder—to help less
privileged women overcome adversity and achieve stability in their lives.

Association of Women Entrepreneurs of Karnataka (AWAKE)

AWAKE was established in December 1983 by seven enterprising women: Madhura Chatrapathy,
Kiran Majumdar, Lekha Chand, Shandrila Naidu, Indrajeet Sahani, Aban Minochar, and
Supanya Datta. Based in Bangalore, it is one of India’s premier institutions for women
entrepreneurs. The name of the organization is reminiscent of Swami Vivekananda’s famous
exhortation: “Arise, awake and stop not till the goal is reached.” AWAKE began with the mission
of economically empowering women through entrepreneurship. AWAKE’s vision is to reach out to
as many women as possible and create entrepreneurs who will be role models for emulation
worldwide. AWAKE is a non-profit and non-governmental organization (NGO). It is a registered
society accredited by the ISO 9001 quality Management System.
AWAKE comprises members who are women entrepreneurs. These members guide women who
want to start or improve their businesses by counseling, training, sharing their experiences and
expertise, and by providing them with peer group support. AWAKE promotes entrepreneurship
through business incubators as well as with entrepreneurship-training and skill development.
The members of AWAKE extend their services every Thursday.

SPECIAL BANK SCHEMES PROMOTING WOMEN'S ENTREPRENEURSHIP

Almost all public-sector banks have special loan schemes for women entrepreneurs.
SANDEEP.L

Cent Kalyani of Central Bank of India Credit Scheme

Cent Kalyani has been specially introduced to offer financial assistance to women entrepreneurs
for economic pursuits in industry, agricultural and allied activities, or business. Central Bank,
19
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

with branches throughout the country, welcomes women entrepreneurs who wish to avail
financial assistance for pursuing vocations of their choice. Credit facilities are available for
women entrepreneurs under the following heads:
• Small business: For entrepreneurs who intend to provide service (not professional service) such
as setting up a small lunch canteen, mobile restaurant, circulating library, and so on.
• Professional and self-employed: For entrepreneurs who are specially qualified/skilled and
experienced like doctors, chartered accountants, engineers, or trained in art or craft and so on.
• Retail trade: For entrepreneurs who intend to engage in retail trading of various commodities.
• Village and cottage/tiny industries: For entrepreneurs who are engaged in manufacturing,
processing, preservation, and services such as handloom weaving, handicraft, food processing,
garment manufacturing in villages and small towns with a population not exceeding 50,000 and
utilizing locally available resources/skills.
• Small-scale industries: For entrepreneurs to start a unit engaged in manufacture, processing,
or preservation of goods.
• Agriculture and allied activities: For women entrepreneurs who are engaged/intend to engage
in agricultural and allied activities, such as farming, floriculture, maintaining fisheries, bee-
keeping, maintaining plant nurseries, sericulture, and trading in agricultural inputs.
• Government-sponsored programmes: Women entrepreneurs are also financed under various
government sponsored programmes where capital subsidies are available.

Bank Scheme

Bank of India Priyadarshini Yojana

Canara Bank CAN Mahila
Central Bank of India Cent Kalyani
Dena Bank Dena Shakti
Oriental Bank of Commerce Oriented Mahila Vikas Yojana
Punjab National Bank Mahila Udyam Nidhi Scheme
Punjab and Sind Bank Udyogini Scheme
State Bank of India Stree Shakti Package
State Bank of Mysore Stree Shakthi Package
Small Industries Development Bank of India Mahila Udyama Nidhi
Tamilnad Mercantile Bank Mahalir Loan
Vijaya Bank V Mangala
Union Bank of India Vikiang Mahila Vikas Yojana
UCO Bank Nari Shakti
ICICI Bank Women’s Account
NABARD Arwind, Mahima

National Bank for Agriculture and Rural Development (NABARD)

The National Bank for Agriculture and Rural Development seeks to remove the barriers of credit
to women. It aims to treat women as risk-free, bankable clients, provide linkages along with
credit, identify appropriate economic activities for women, promote women’s self-help groups,
and link them with the formal banking system. NABARD has evolved exclusive schemes for
women such as Assistance to Rural Women in Non-farm Development (ARWIND) and Marketing
of Non-farm Pnoducts of Rural Women (MAHIMA) as well as support in the form of grant
assistance for setting up 'women development cells” by Regional Rural Banks (RRBs)/
cooperative banks. ARWIND has both credit and grant components. It is envisaged that a
women’s group organized or sponsored by a suitable agency could avail of bank credit normally
SANDEEP.L

not exceeding INR. 50,000 per woman member for an own account activity or group activity, with
100 percent refinance support from NABARD. MAHIMA seeks to create a niche or pro-woman
market and assists in credit by way of 100 percent refinance up to INR. 10 lakh.

20
ENTERPRENEURSHIP AND SMALL BUSINESS ENTERPRISES

Small Industries Development Bank of India

SIDBI is assisting the entire spectrum of the SSI sector including village and cottage industries
through suitable schemes tailored to meet the requirements of setting up of new projects,
expansion, diversification, modernization, and rehabilitation of existing units. SIDBI has two
women-specific schemes.
Under Mahila Vikas Nidhi (MVN), well-managed NGOs with a good track record and linkages with
financial institutions are eligible to borrow. It is a specially designed fund for economic
development of women, providing them avenues for training and employment opportunities. A
judicious mix of loan and grant, the basic activity involves setting up of training-cum-production
centers. The assistance is basically catalytic and only the really well-run NGOs can secure
grants. Assistance may be in the form of loans. Repayment is normally within five years and the
initial moratorium is of one year or 18 months.
The Mahila Udhyam Nidhi scheme is for enterprising women entrepreneurs to set up new
projects in the tiny and small-scale sector, and for the rehabilitation of viable, sick small-scale
industry units. This scheme serves to eliminate the gap in equity. The scheme is operated
through the State financial organization's twin-function industrial design centers/scheduled
commercial banks/scheduled urban cooperative banks. The cost of the project should not exceed
INR. 10 lakh.

Stand up India scheme: The stand-up India scheme aims at promoting entrepreneurship
among women and scheduled castes and tribes. Stand-Up India Scheme facilitates bank loans
between INR. 10 lakh and INR. 1 Crore to at least one Scheduled Caste (SC) or Scheduled Tribe
(ST) borrower and at least one woman borrower per bank branch for setting up a Greenfield
enterprise. This enterprise may be in manufacturing, services or the trading sector. In case of
non individual enterprises, at least 51% of the shareholding and controlling stake should be held
by either an SC/ST or woman entrepreneur. In order to foster smooth implementation of Stand-
up India scheme, Small Industries Development Bank of India (SIDBI) developed a web portal
www.standupmitra.in.

SANDEEP.L

21